P.A v. United States

• Decision Date: 21 June 2018
• Docket Number: Court No. 16-00047,Slip Op. 18 - 76
• Parties: LA MOLISANA S.p.A, Plaintiff, v. UNITED STATES, Defendant, and NEW WORLD PASTA CO. and DAKATA GROWERS PASTA CO., Defendant-Intervenors.
• Court: U.S. Court of International Trade

LA MOLISANA S.p.A, Plaintiff, v. UNITED STATES, Defendant,andNEW WORLD PASTA CO.and DAKATA GROWERS PASTA CO., Defendant-Intervenors.

Slip Op. 18 - 76 Court No. 16-00047

UNITED STATES COURT OF INTERNATIONAL TRADE

June 21, 2018

Before: R. Kenton Musgrave, Senior Judge

OPINION AND ORDER

[Sustaining remand results on 18th administrative review of certain pasta from Italy.]

David J. Craven, Travis & Rosenberg, of Chicago, IL, for the plaintiff.

Elizabeth A. Speck, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for the defendant. On the brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of Counsel was Natan P.L. Tuban, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

Paul C. Rosenthal and David C. Smith, Kelley Drye & Warren LLP, of Washington, DC, for the defendant-intervenors.

Musgrave, Senior Judge: This opinion concerns the results of remand of the 18th administrative review ("AR") of the antidumping duty order on certain pasta from Italy pursuant to the prior opinion on the matter. See Slip Op. 17-111 (Aug. 23, 2017).¹ Familiarity with that decision is here presumed. To the International Trade Administration, U.S. Department of Commerce ("Commerce" or "Department"), two issues were remanded: (1) whether Commerce failed to provide meaningful opportunity for addressing the agency's differential pricing analysis; and (2) whether Commerce erred in requiring the plaintiff La Molisana S.P.A ("La Molisana" or "LM") to report its pasta sales product shapes in conformity with the existing identities and categories of shapes on Commerce's pasta shape classification list. On remand Commerce reconsidered the record and arguments presented by La Molisana on both issues.

I

The "Final Results of Redetermination Pursuant to Court Remand" ("Redetermination"), now on the record (R-PDoc 3), addressed La Molisana's arguments with respect to the differential pricing issue as raised in its administrative case brief, PDoc 208 (Oct. 6, 2015), and via response to La Molisana's comments on the draft remand results, R-PDoc 2 (Nov. 1, 2017), by noting that the Apex Frozen Foods decisions' upholding² of the application of zeroing when using the average-to-transaction comparison methodology of 19 U.S.C. §1677f-1(d)(1)(B) disposed of La Molisana's methodological arguments, and with respect to La Molisana's seasonality-of-product argument the Redetermination states that there was no analysis or evidence on the recordto support it. The Redetermination also notes that the court had recently found no statistical error inherent when the entire population of respondents' sales in the United States market is analyzed for differential pricing and held the use of "widely accepted thresholds" for the Cohen's d coefficient not arbitrary. Redetermination at 13-16, noting Xi'an Metals & Minerals Import & Export Co. v. United States, 41 CIT ___, ___, 256 F. Supp. 3d 1346, 1364 (2017).

In its comments here, La Molisana continues to believe that differential pricing analysis is nothing more than "zeroing in a disguise and that ultimately it will be found to be a violation of the United States' WTO obligations"³, but since the issue has been upheld in other cases La Molisana offers no further comment on the Redetermination. Suffice it to state at this point that substantial evidence and law support the Redetermination on this issue.

II

With respect to the issue of shape classification, La Molisana in its administrative case brief had requested reclassification of several specialty cuts, coded as category "6" in Commerce's shape list, to be reclassified as regular short cuts, coded as "5," solely on the basis of its own production line speeds. See PDoc 208. On remand, Commerce maintains that its prior final results are correct in denying La Molisana's request. Redetermination at 5.

The Redetermination states that Commerce has a statutory duty to uphold a stable and consistent model match methodology; that the model match methodology for this antidumpingproceeding was developed during the original investigation and refined during the subsequent three administrative reviews, and that its long-standing practice is that once a model-match methodology has been established, it will not modify that methodology in subsequent proceedings unless there are compelling reasons to do so;⁴ that reclassification of shapes must be supported by industry-wide and not company-specific technical information; that company-specific information in support of a modification of the shape list must relate to a new shape classification; and that allowing company-specific shape reclassifications would render the model-match criteria unpredictable, volatile, and inconsistent. Id. at 5-13, 19-31. Commerce's main concern in this regard appears to be the potential for manipulation of U.S. market and home market product sales, resulting in less accurate price-to-price comparisons in the dumping margin. See id. at 13, 29.

In accordance therewith, Commerce found on remand that La Molisana had not presented any industry changes that would warrant shape reclassification, and that the information La Molisana did place on the record was insufficient to warrant shape reclassification. Id. at 5, 19-20. Specifically, the Redetermination points out that only six out of the 20 shapes for which La Molisana sought reclassification appear in La Molisana's product catalogue in the LM ShapeExhibits, and that La Molisana had not provided descriptions or pictures for 14 of the 20 shapes for which it had requested reclassification.⁵ Redetermination at 4. La Molisana's comments disagree that information is "missing" from the record, as the issue here is only the throughput rate, not whether a cut is short or long, e.g., R-PDoc 2 at 2-3, but be that as it may, the administrative position expressed in the Redetermination is that the information on the record does not support reclassification regardless, as the information is company-specific (e.g., production speed), and, as mentioned, Commerce's policy is only to consider company-specific information when it relates to new shapes not already on the existing shape classification list. Commerce then reiterated that all of La Molisana's proposed reclassifications pertained to shapes that were already identified on the shape list. E.g., Redetermination at 5 ("all of the shapes that La Molisana sought to reclassify are on the Department's shape list").

As Commerce points out, Prodotti Alimentary Meridionali, S.R.L. v. United States, 27 CIT 547, 548-50 (2003) ("PAM"), upheld the shape model match methodology as reasonable. PAM considered argument over two shapes, short cuts and soup cuts (or soupettes), that were listed on the shape list as category 5 and category 7, respectively, and that were "produced on the same machine." PAM at 548. Because their production speeds were "very similar", the PAM plaintiff requested Commerce to "merge" the two product categories. That was effectively an "industry-wide" request, but Commerce declined. Because the same pasta shapes could be produced on different machines, the court agreed with Commerce that the similarities in machine type usedshould not be determinative. Further, "[e]ven if certain products are produced on the same machines at similar speeds, that does not necessarily establish that they are the same product, even if they might be used in a similar manner." Id. at 549. Therefore, the PAM plaintiff had "not demonstrated a flaw in the model match methodology which requires its amendment." Id.

Although it was in the context of the record presented thereat that PAM held the model-match methodology reasonable, and the matter at bar is the inverse of that case, the result here is ultimately the same. Commerce's position is that AR15's acknowledgment of the 75 percent throughput rate to distinguish pasta shape for specialty long and short pasta cuts was only a part of the description of the development of the model-match methodology in the original investigation and its refinement in subsequent reviews, which circumstance "does not indicate that it is [only] production speed, [as opposed to] sales characteristics, [that] distinguishes special and regular cuts, as La Molisana claims" nor does it "validate La Molisana's use of its line speeds to reclassify shapes that are already on the Department's shape list." Redetermination at 12. Commerce also contends La Molisana's description of AR4's acceptance of reclassifying the certain pasta shapes considered therein is inaccurate, as that administrative review considered shapes that were not already listed on the shape classification list. See Def's Resp. to Comments at 9-10, quoting Redetermination at 24 (quoting AR4 I&D Memo at cmt 18).⁶

The first contention obscures that La Molisana's focus is solely upon the 75 percent production speed demarcation; the other three considerations of the shapes methodology are not relevant to that argument. Cf. New World Pasta Co. v. United States, 28 CIT 290, 309 n.22, 316 F. Supp. 2d 1338, 1355 n.22 (2004) ("line speed is a shorthand for shape"). The second contention is imprecise.⁷ The defendant intervenors provide a rather fuller response, in contending that AR4"wrongly" implied pasta shapes might be re-classified based on a company's own line speed, wherein Commerce explicitly stated: "For those cuts which PAM believed were specialty cuts yet the Department considered a regular cut (or vice versa), [PAM] provided the line speed data. We reviewed this information and accepted the revised shape classification as provided by PAM." AR4 I&D Memo at cmt 19. Cf. also notes 6 & 7. The court expresses no opinion on the "correctness" of AR4, but the defendant intervenors are themselves correct in arguing that AR4 apparently stands apart from...